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OSW COMMENTARY NUMBER 219 1 American Concept Centre for Eastern Studies NUMBER 219 | 21.07.2016 www.osw.waw.pl Russia’s Greater Eurasia and China’s New Silk Road: adaptation instead of competition Marcin Kaczmarski, Witold Rodkiewicz The argument that a crisis in Russian-Chinese relations is unavoidable has been repeatedly referred to by analysts since the 1990s. The reason for this crisis would be geopolitical com- petition between the two powers in Central Asia. In 2013, China’s President Xi Jinping anno- unced the concept of the New Silk Road (referred to by the Chinese side as ‘One Belt, One Road’). At the same time, Moscow announced its efforts to build its own integration project in the form of the Eurasian Economic Union. These two developments seemed to confirm that the initial argument was correct and that the two projects were apparently fated to compete. Meanwhile, in May 2015, during President Xi Jinping’s visit to Moscow, a joint declaration was issued calling for combining the two projects and creating a formal mechanism for their co- ordination in the form of a joint task force. The vision of “a great Eurasian partnership” anno- unced by President Vladimir Putin during the International Economic Forum in St. Petersburg on 16–17 June 2016 – which he also referred to as the Greater Eurasia project – is a signal that Moscow has ultimately opted for the strategy of joining a stronger partner (bandwagoning) instead of choosing the strategy of counterbalancing the rising power of China. At the same time, Moscow is trying to conceal the growing asymmetry in Russian-Chinese relations. The New Silk Road: region. More than 60 states have declared the- the Chinese vision for Eurasia ir participation in the project. The new concept is the outcome of the rising material potential The Chinese concept of the New Silk Road, which of China, which has become evident especially was presented for the first time by President after the global economic crisis in 2008–2009, Xi Jinping in the autumn of 2013, provides for of the growing confidence of Chinese elites and a construction of infrastructural connections be- of the search by China’s leader Xi Jinping for tween China and Europe, mainly in China’s ne- a unique formula for Chinese foreign policy. ighbourhood. Specific components of the New The New Silk Road reflects the Chinese vision Silk Road include: Central Asia (in the form of of the organisation of relationships in Eura- the Silk Road Economic Belt), South-Eastern and sia as broadly understood. The most impor- Southern Asia (in the form of the 21st century tant elements of this vision include: openness Maritime Silk Road) and Pakistan (in the form to potential participants, efforts to limit po- of the China-Pakistan Economic Corridor). The tential trade barriers and neutralise closed re- Chinese initiative also includes transit countries gional economic cooperation formats, as well and regions on the way to Europe, i.e. Russia, as attempts to devise an economic and de- Central and Eastern Europe, the Balkans, the velopment cooperation formula with smaller South Caucasus, Turkey and the Middle East states which would be an alternative to the OSW COMMENTARY NUMBER 219 1 American concept. At the same time, using gional initiatives such as the Russian-controlled the initiatives carried out under the New Silk Eurasian Economic Union, which could form Road, China is striving to exert durable influ- a barrier to the Chinese economy, for example ence on states located in its neighbourhood. by establishing a customs union. In addition, This type of influence should be independent this approach is a method of ‘concealing’ Chi- of potential domestic changes in these states. na’s economic expansion and presenting it as a form of multilateralism and self-limiting of po- litical ambitions which potential partners could The aim of the New Silk Road project is to view as excessive. At the same time, the New facilitate China’s economic expansion and Silk Road remains a unilateral initiative, which to maintain the openness of external mar- so far has been shaped by the Chinese side, in kets to Chinese trade and investments. contrast to initial announcements. Moreover, Beijing is showing no particular readiness to define the rules governing the New Silk Road’s The New Silk Road remains a very broad con- activities more clearly. Instead, it limits itself to cept, with a framework which has been insti- issuing vague statements in which it refers to tutionalised to only a small degree. So far, only “mutually beneficial (win-win) cooperation”. mechanisms for funding the New Silk Road have The vague nature of the principles on which been created. A unilateral (i.e. Chinese-only) the Chinese concept is based seems to suggest New Silk Road Fund has been established, and that Beijing is only slightly interested in offi- a multilateral Asian Infrastructure Investment cial announcements by those states involved in Bank (AIIB) created as an additional tool to fund the project, in which they declared that they projects under the New Silk Road initiative. As would accept China’s leading role in the initi- a consequence, it can be expected that the New ative. Real economic benefits seem to matter Silk Road will serve the purposes of public di- much more. These mainly include maintaining plomacy and create the impression that Chinese the openness of external markets to China’s policy is multilateral. However, a major portion economic expansion and enabling the export of China’s activity will continue to be carried of production surplus and excess capital. For out within a flexible formula of bilateral rela- Beijing, the form in which its influence is exert- tions. Under the initiative of building the New ed seems to be much less important that the Silk Road, China is carrying out several invest- content of such influence. ment projects, mainly in the field of transport infrastructure (railways in Central Asian states, Russia’s response: Greater Eurasia seaports in South-East Asia) and energy infra- structure (power plants in Pakistan). Over the Russia has interpreted the launch of the New last three years, most loans granted by Chinese Silk Road project as a declaration that Chi- state-controlled banks have been allocated to na is intensifying its economic penetration participants in the New Silk Road project. of Central Asia1. Since at least the end of the This formula of the New Silk Road reflects the 1990s, Moscow has been observing China’s functional understanding by Chinese elites of rising economic influence in this region with the question of influence. From Beijing’s per- concern. There were fears that Beijing might spective, the initiative is intended to facilitate economic expansion and help keep external 1 For more on China’s economic penetration of Central Asia, markets open to Chinese trade and investments. see Aleksandra Jarosiewicz, Krzysztof Strachota, ‘China vs. It is also expected to help bypass certain re- Central Asia. The achievements of the past two decades’, OSW Studies no. 45 (2013), especially chart 1, p. 57. OSW COMMENTARY NUMBER 219 2 want to use this influence to challenge Rus- the lowering of tariffs, and ultimately the crea- sia’s status as a regional hegemon. Russia’s tion of a free trade zone3. economic integration projects, which it has Above all, the new project is intended to create been dynamically implementing since 2011 the impression that it is Moscow that is taking (the Customs Union, the Common Econom- the initiative in Russian-Chinese relations, and ic Space, the Eurasian Economic Union), were thereby to conceal and legitimise the growing intended to stop this trend, among other asymmetry in bilateral relations. Secondly, the things. This is why initially Moscow was re- idea of Greater Eurasia – similar to the previ- luctant to accept the new Chinese initiative2. ous idea of ‘Greater Europe’4 – is intended to be a propaganda instrument to persuade Western Europe to develop cooperation with Russia on The Greater Eurasia project is intended to Russia’s terms. conceal and legitimise the growing asym- metry in Russian-Chinese relations. The origin of the project The Greater Eurasia project was devised at a point when the Kremlin began to face fun- However, at a summit in Shanghai in May 2014, damental challenges. Some of these challeng- Russia and China issued a joint statement in es (including the halt of Russia’s economic which they declared their readiness to launch growth) came as a consequence of the global talks on synchronising their economic coop- economic slowdown and the lack of domes- eration projects: the Eurasian Economic Un- tic reforms. However, other challenges result- ion (EaEU) and the New Silk Road. At the 2015 ed from Russia’s revisionist policy towards the summit a separate declaration on cooperation West which it has pursued at least since 2007 between the two initiatives was adopted. Dur- (the significant speech by President Putin at ing this year’s International Economic Forum the Munich security conference). Russia’s at- in St. Petersburg (16–17 June), at the Shanghai tempt to expand the Eurasian project to include Cooperation Organisation summit in Tashkent Ukraine, made as part of this policy, has led to (24 June) and during his visit to China (25 June), a confrontation with the United States and with President Vladimir Putin proposed a new vision the European Union, and ultimately caused of economic cooperation in Eurasia: a “great a limitation of Russia’s access to Western loans Eurasian partnership” which he also referred to and technologies. At the same time, the rising as “Greater Eurasia”. It would involve the crea- economic power of China has lead to an asym- tion of a network of bi- and multilateral trade metry in Moscow’s relations with Beijing, which agreements between the Eurasian Economic began to become increasingly evident in 2015.
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